Abbott calls rate rise a "kick in the guts"

The latest interest rate rise is a "kick in the guts" that shows the federal government can't manage the economy, Opposition Leader
Tony Abbott
has said.

"I think it's a kick in the guts for homebuyers struggling with mortgage repayments and I think it's a kick in the guts for small business," Mr Abbott told reporters in Melbourne on Wednesday, before taking off on the nine-day Pollie Pedal fundraising ride.

"I think it's a real pity that the Rudd government has its foot on the economic accelerator while the Reserve Bank has its foot on the brakes.

"It shows to me that this is a government which cannot manage the economy properly."

Homeowners could face even more pain next month with some economists pencilling in yet another interest rate rise.

The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.25 per cent at its monthly board meeting on Tuesday - the fifth increase in seven months.

The four big banks - the ANZ, Commonwealth, National Australia Bank and Westpac - all followed suit, matching the RBA's rise.